Since Its State Right to Work Law Took Effect, Indiana Has Added More Than 43,000 Factory Jobs

As a story recently published by the Indianapolis Star (see the first link below to read the whole thing) documented, an impressive array of companies have announced plans just since the beginning of 2015 to expand and/or modernize factories as well as build new ones in Indiana, which became America’s 23rd Right to Work state in March 2012:

The manufacturing investments have rolled in to Indiana this year: $600 million at Rolls-Royce, $140 million at Subaru and $1.2 billion at General Motors, to name a few.

Almost $2 billion has been invested to overhaul production facilities or expand corporate footprints — a trend that economic experts say puts Indiana at the forefront of states with manufacturing-heavy economies.

“It’s not the norm,” said Barry Bosworth, an economic expert at The Brookings Institution, a Washington-based think tank. “It sounds like Indiana is doing well.

The fact that Indiana and Michigan, which became America’s 24th Right to Work state in March 2013, were respectively ranked #2 and #1 for 2014 manufacturing payroll job growth as reported by the U.S. Labor Department makes perfect sense to site-selection experts like Richard H. Thompson, who leads the Global Supply Chain & Logistics Team for JLL.

As Thompson recently told a reporter for the trade journal Area Development, “From a manufacturing perspective, [Right to Work is] the first lens in the decision. They don’t want to be in a [forced]union environment, and that’s why most of the auto manufacturers have gone to the Southeast.”

Mark Sweeney, senior principal with McCallum Sweeney Consulting, concurs: “The state of Indiana and the state of Michigan can already point to be increased activity in the manufacturing sector. . . . If you’re a right-to-work state, you get more manufacturing opportunities than if you’re not.”

(See the second link below for more information.)

Overall, from March 2012 through September 2015 (the most recent month for which such data are available), Indiana enjoyed a net manufacturing job gain of 9.0%, representing a little over 43,000 manufacturing jobs. In absolute terms, that’s the second highest increase in the nation. Meanwhile, in forced-unionism states over the same period, manufacturing employment grew by just 1.3%.

From March 2013, the month Michigan’s Right to Work law took effect, through September 2015, the Wolverine State enjoyed a net gain of 9.3%, or 51,500, in factory jobs. Since it banned forced union dues and fees, Michigan’s increase in manufacturing employment has been the highest in the nation, both in percentage and in absolute terms.

Of course, Right to Work isn’t primarily an economic issue. The most important reason to pass Right to Work laws is to protect the individual employee’s freedom of choice with regard to union membership or non-membership. But the fact that a vast amount of statistical evidence indicates Right to Work laws are economically beneficial is another important consideration in their favor.

Mark Sweeney, senior principal with McCallum Sweeney Consulting, a firm which provides site-selection services to leading companies worldwide: “The state of Indiana and the state of Michigan can already point to increased activity in the manufacturing sector. . . . If you’re a right-to-work state, you get more manufacturing opportunities than if you’re not.” Image: WCPO (ABC), Cincinnati, Ohio